Private Media Group (PRVT)

2.4 Conversion of Shares.

(a) Amalgamation Consideration; Adjustments.

(i) The “Amalgamation Consideration” shall be an aggregate of 6,000,000 Amalco Preference Shares (subject to adjustment as set forth in Section 2.4(a)(ii) below), consisting of the following:

(A) an aggregate of 3,300,000 Amalco Preference Shares (or, if the Amalgamation Consideration is adjusted pursuant to Section 2.4(a)(ii), 55% of the adjusted Amalgamation Consideration), to be issued pursuant to Section 2.4(c)(i) and Section 2.5 of this Agreement, subject to adjustment as provided in this Agreement (the “Closing Shares”);

(B) an aggregate of 600,000 Amalco Preference Shares (or, if the Amalgamation Consideration is adjusted pursuant to Section 2.4(a)(ii), 10% of the adjusted Amalgamation Consideration), to be issued pursuant to Section 2.4(c)(ii) and Section 2.6 of this Agreement, subject to adjustment as provided in this Agreement (the “Initial Deferred Shares”); and

(C) an aggregate of 2,100,000 Amalco Preference Shares (or, if the Amalgamation Consideration is adjusted pursuant to Section 2.4(a)(ii), 35% of the adjusted Amalgamation Consideration), to be issued pursuant to Section 2.4(c)(ii) and Section 2.7 of this Agreement, subject to adjustment as provided in this Agreement (the “Total Earnout Shares”).

The Closing Shares, the Initial Deferred Shares and the Total Earnout Shares shall be referred to herein collectively as the “Amalgamation Consideration Shares.”

(ii) The aggregate Amalgamation Consideration shall be subject to adjustment as follows:

(A) if the Settlement Price exceeds $1.25 (as adjusted for stock dividends, stock splits, combinations of shares, reorganizations, recapitalizations, reclassifications or other similar events with respect to the Private Shares), the Amalgamation Consideration shall be reduced to a number of Amalco Preference Shares equal to $7,500,000 divided by the Settlement Price;

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(B) if the Settlement Price is less than $0.60 (as adjusted for stock dividends, stock splits, combinations of shares, reorganizations, recapitalizations, reclassifications or other similar events with respect to the Private Shares), the Amalgamation Consideration shall be adjusted as is mutually agreed upon in writing by Buyer and the Company; and

(C) if the Company’s trailing 12 month revenue as of June 30, 2009 as reflected in or derived from the Financial Statements is less than $7,250,000, the Amalgamation Consideration shall be reduced by 0.8 Amalco Preference Shares for each $1.00 of shortfall in addition to any adjustments referenced in clauses (A) and (B) above.

(b) Share Purchase. At the Closing of the Share Purchase, each issued and outstanding Company Share will be purchased by Sub from the Sellers in exchange for the right to receive the following, subject to the adjustments and payable in the manner set forth in this Agreement (the “Share Purchase Consideration”):

(i) Closing Shares. The number of Sub Preference Shares equal to the Pro Rata multiplied by 3,300,000 Sub Preference Shares (or, if the Amalgamation Consideration is adjusted pursuant to Section 2.4(a)(ii), a number of Sub Preference Shares equal to the number of adjusted Closing Shares), which Sub Preference Shares shall be issued and delivered at Closing;

(ii) Initial Deferred Shares.

(A) That number of Sub Preference Shares equal to the Pro Rata multiplied by 300,000 Sub Preference Shares (or, if the Amalgamation Consideration is adjusted pursuant to Section 2.4(a)(ii), a number of Sub Preference Shares equal to one half of the number of adjusted Initial Deferred Shares), which shall be issued by Sub to the Sellers on the first anniversary of the Closing Date in accordance with Section 2.6 below; and

(B) That number of Sub Preference Shares equal to the Pro Rata multiplied by 300,000 Sub Preference Shares (or, if the Amalgamation Consideration is adjusted pursuant to Section 2.4(a)(ii), a number of Sub Preference Shares equal to one half of the number of adjusted Initial Deferred Shares), which shall be issued by Sub to the Sellers on the second anniversary of the Closing Date in accordance with Section 2.6 below; and

(iii) Total Earnout Shares. That number of Sub Preference Shares equal to the Pro Rata multiplied by 2,100,000 Sub Preference Shares (or, if the Amalgamation Consideration is adjusted pursuant to Section 2.4(a)(ii), a number of Sub Preference Shares equal to the number of adjusted Total Earnout Shares), payable following Closing on the terms and subject to the conditions contained in Section 2.7 below and the Earnout Schedule.

(c) Amalgamation. At the Effective Time, without any further action on the part of the Company, Sub or Amalco, the outstanding Sub Shares shall be cancelled and replaced with the right to receive the following, subject to the adjustments and payable in the manner set forth in this Agreement:

(i) each outstanding Sub Preference Share shall be cancelled and replaced by one Amalco Preference Share;

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(ii) each right to receive a Sub Preference Share (whether in respect of an Initial Deferred Share or an Earnout Share) shall be cancelled and replaced by the right to receive one Amalco Preference Share; and

(iii) each outstanding Sub Common Share will be cancelled and replaced by one Amalco Common Share.

(d) No Further Rights. All Sub Shares, when cancelled in accordance with this Section 2.4, shall no longer be outstanding and shall automatically be canceled and retired, and each holder thereof shall cease to have any rights with respect thereto, except, with respect to the Sub Preference Shares, the right to receive a portion of the Amalgamation Consideration in accordance with the terms hereof. At the Effective Time, the share transfer books of the Company shall be closed, and no transfer of Sub Shares shall be made thereafter, except to reflect the transactions contemplated by this Agreement. If, after the Effective Time share certificates are presented to Amalco or Buyer, they shall be canceled and exchanged as provided for in this Agreement.

2.5 Delivery of Closing Shares. At and after the Effective Time, Amalco will make available, and Sellers shall be entitled to receive, the Closing Shares. Neither the Closing Shares nor the Private Shares issuable upon exchange thereof shall be transferred to any third party by the Sellers or otherwise mortgaged, charged, pledged or encumbered until the first anniversary of the Closing Date (the “Restriction Period”), subject to the provisions of Section 10.7. Certificates evidencing the Closing Shares and/or the Private Shares issuable upon exchange thereof shall bear an appropriate legend to reflect these restrictions, including the provisions of Section 10.7, during the time these restrictions are in effect. Upon the expiration of the Restriction Period Sellers shall promptly submit certificates containing such legends to Buyer or Amalco, as applicable, and, subject to the provisions of Section 10.7, including provisions entitling Buyer to hold back Amalgamation Consideration Shares, Buyer or Amalco, as applicable, shall promptly send by overnight courier replacement certificates free of such legends.

2.6 Delivery of Initial Deferred Shares. One half of the Initial Deferred Shares shall be issued by Amalco to the Sellers on the first anniversary of the Closing Date and one half the Initial Deferred Shares shall be issued by Amalco to the Sellers on the second anniversary of the Closing Date (each of such dates, a “Release Date”), provided, however that if, as of the applicable Release Date, an Indemnification Event in excess of the applicable Indemnification Threshold has occurred in respect of such Seller, then the number of Initial Deferred Shares to be so delivered shall be reduced in accordance with the provisions of Section 10.7.

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2.5 Conversion of Shares.

(a) GreenCine Merger.

(i) GreenCine Common Stock. At the Effective Time of the GreenCine Merger each of the issued and outstanding GreenCine Shares (other than treasury shares) immediately prior to the Effective Time of the GreenCine Merger, by virtue of such Merger and without any action on the part of Buyer, Merger Sub I, GreenCine or the GreenCine Sellers, will be cancelled and extinguished, and each such GreenCine Share will be converted into the right to receive the following, subject to the adjustments and payable in the manner set forth in this Agreement, the following (the “GreenCine Merger Consideration”):

(A) Private Closing Shares. The number of Private Shares equal to the product of (x) the GreenCine Pro Rata multiplied by (y) the product of (1) the GreenCine Allocation multiplied by (2) the 7,221,338 Private Closing Shares;

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(B) Private Initial Deferred Shares. The number of Private Shares equal to the product of (x) the GreenCine Pro Rata multiplied by (y) the product of (1) the GreenCine Allocation multiplied by (2) the 1,312,971 Private Initial Deferred Shares;

(C) Private Earnout Shares. The number of Private Shares equal to the product of (x) the GreenCine Pro Rata multiplied by (y) the product of (1) the GreenCine Allocation multiplied by (2) the 4,595,397 Total Earnout Shares;

(ii) GreenCine Treasury Shares. At the Effective Time of the GreenCine Merger each issued and outstanding GreenCine Share owned by GreenCine immediately prior to the Effective Time of the GreenCine Merger will automatically be cancelled and retired and will cease to exist.

(iii) Conversion of Merger Sub I Capital Stock. At the Effective Time of the GreenCine Merger each of the issued and outstanding shares of capital stock of Merger Sub I immediately prior to the Effective Time of the GreenCine Merger, will be converted into one validly issued, fully-paid and non-assessable share of the Surviving Corporation I.

(b) ThinkForward Merger.

(i) ThinkForward Common Stock. At the Effective Time of the ThinkForward Merger each of the issued and outstanding ThinkForward Shares (other than treasury shares) immediately prior to the Effective Time of the ThinkForward Merger, by virtue of such Merger and without any action on the part of Buyer, Merger Sub II, ThinkForward or the ThinkForward Sellers, will be cancelled and extinguished, and each such ThinkForward Share will be converted into the right to receive the following, subject to the adjustments and payable in the manner set forth in this Agreement, the following (the “ThinkForward Merger Consideration”):

(A) Private Closing Shares. The number of Private Shares equal to the product of (x) the ThinkForward Pro Rata multiplied by (y) the product of (1) the ThinkForward Allocation multiplied by (2) the 7,221,338 Private Closing Shares;

(B) Private Initial Deferred Shares. The number of Private Shares equal to the product of (x) the ThinkForward Pro Rata multiplied by (y) the product of (1) the ThinkForward Allocation multiplied by (2) the 1,312,971 Private Initial Deferred Shares;

(C) Private Earnout Shares. The number of Private Shares equal to the product of (x) the ThinkForward Pro Rata multiplied by (y) the product of (1) the ThinkForward Allocation multiplied by (2) the 4,595,397 Total Earnout Shares.

(ii) ThinkForward Treasury Shares. At the Effective Time of the ThinkForward Merger each issued and outstanding ThinkForward Share owned by ThinkForward immediately prior to the Effective Time of the ThinkForward Merger will automatically be cancelled and retired and will cease to exist.

(iii) Conversion of Merger Sub II Capital Stock. At the Effective Time of the ThinkForward Merger each of the issued and outstanding shares of capital stock of Merger Sub II immediately prior to the Effective Time of the ThinkForward Merger, will be converted into one validly issued, fully-paid and non-assessable share of Surviving Corporation II.

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